History of LIC of India
The Insurance Act of 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over the insurance business in India. The demand for nationalization of the life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act of 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially, the management of the companies were taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill.
The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on the 1st of September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reaching all insurable persons in the country, providing them adequate financial cover at a reasonable cost.